NEW BUILD | AMERICA’S GENERATION GAP scenario would be two federal administrations in 10
years”. At the same time successive state administrations have to be considered. He adds, “Historically it was easier to build nuclear units under older market designs with fully- regulated utilities, who added the unit to their rate base. In a regulated environment there is more confidence that you can cover your cost.” In deregulated electricity markets, “Who can invest in
such massive capital project when [past] cost overruns have been substantial? … There is a real challenge in the uncertainty and it makes it very difficult to underwrite a project… If you could build in 10 years, instead of 17, you might underwrite it”. Coleman says scalability – and the possibility of building
fast and using standard units – is part of the appeal of so-called small modular reactors (SMRs). This is one reason why the ‘hyperscaler’ data centre operators have expressed interest. But Coleman warns that his list of headwinds remains the same for SMRs. “SMRs still face permitting and perception risks and the technology is not commercialised. The modular nature of the technology is not a benefit if you need a gigawatt of power [eg for a datacentre],” while the alternative – likely to be a gas turbine – can be bought and installed ‘off the shelf’. He says the hyperscalers and data centres “may be a
catalyst” to help get SMRs built, but he says the timeline to build them at-scale is still out of alignment with how hyperscalers want them to be deployed to serve data centres. The deals that have been signed between SMRs and hyperscalers are “not really that firm”, he says, and given the long lead times, if they are realised it may not be at the originally expected site.
Meeting the need for ‘dispatchable power’ If nuclear can overcome the headwinds Coleman describes, it is in a good position to provide the ‘firm’ power at scale that the US is seeking. However, it is less clear that it can help meet the country’s need for dispatchable capacity –
capacity that can act in a flexible way to meet the demands of the grid operator, whether that flexibility is required over timescales of seconds, hours or days. Once again, it is data centres that represent a major
challenge. The North American Electric Reliability Council (NERC), highlighted this challenge in its 2025 ‘State of Reliability’ report on the US grid, published in June 2025. It said large data centres are “a significant near-term reliability challenge,” especially as they “can be developed faster than the generation and transmission infrastructure needed in the area to support them, resulting in lower system stability”. That challenge may be because the load disconnects in response to external events – as in an event in 2024, when 1.5 GW of data centres disconnected simultaneously and unexpectedly due to a transmission line fault in 2024. The report said Texas’s ERCOT system operator had experienced similar events, but at the 100–400 MW scale. NERC noted “rapid changes in load are part of normal
operations for these facilities, which raises concerns for balancing, frequency stability, and voltage stability” and said “the voltage sensitivity and rapidly changing, often unpredictable, power usage of these facilities creates new operating challenges”. Fast response is required, and for this, batteries are increasingly becoming the go-to technology. Batteries represented an “ever increasing portion of ERCOT’s ancillary services market, primarily for frequency regulation services, responsive reserve services, fast frequency response, contingency reserve services, and non-spinning reserves,” it said. Installed battery capacity in Texas had reached 10 GW in December 2024, up from 1.3 GW in January 2022, and that was set to increase significantly. A huge increase in utility-scale battery arrays has
been a feature of many electricity systems over the last decade and it is not only Texas where the USA has joined the rush. According to the US DOE’s Energy Information Administration (EIA), annual battery installations leapt from 43 MW in 2003 to 6.8 GW in 2023. Wood Mackenzie figures suggest that utility-scale installations will reach 16.2 GW in 2025, up 49% on 2024. As with wind and solar, battery installers are rushing to complete new projects before OBBA-led changes to tax credit regulations take effect in 2026.
Increasingly, batteries are co-located with solar and wind
sites, because the combination allows site exports to be optimised and helps manage renewables’ volatility, while the battery can participate in near-term energy markets or ancillary markets. Currently nuclear has little track record in joining ancillary services markets, although of course it provides inertia to the system, because it does not access the type of flexibility required, either as a large GW-scale unit or an array of SMRs. Co-located batteries may provide that market opportunity. What is more, increasingly nuclear will be operating in
markets where there is regular surplus and the ability to reduce export to the grid is valuable – something that could be achieved by charging up battery arrays on-site. If nuclear wants to become as attractive a ‘dispatchable’
Above, figure 1: Analysis of the impact of recent US energy policy intervention shows a boom for wind and solar but little impact on nuclear Source: Baringa
40 | November 2025 |
www.neimagazine.com
source of power as it is a ‘firm’ source, plant operators may have to consider using space on their site to co-locate batteries. That could provide flexibility to complement the firm power produced by the nuclear plant. ■
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